Vedanta To Sale Of Steel Assets By March 2024, Response To Help Reduce Debt Burden: Anil Agarwal

Last week, mining giant Vedanta announced that its board had given the green light to a streamlined asset-owner business model, leading to the creation of six distinct listed entities.

Anil Agarwal said, "We have payment coming due in January (2024) and August. We have a 1 billion dollar payment in January and a 500-600 million dollar payment in August. Both are completely lined up."

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Vedanta Ltd Chairman Anil Agarwal on Tuesday said Vedanta will sale of its steel assets by the end of this financial year and the response to the sale will contribute to reducing the company's debt burden. The company has initiated a review of its steel and iron raw material business, which was established through the acquisition of ESL Steel in 2018 for Rs 5,230 crore. The strategic move aims to streamline the company's focus on its core mining operations.

During an interview with CNBC-TV18, Anil Agarwal said, "We had a phenomenal response for our steel and iron ore sale. This can help take care of our debt. We believe that by March, we will be able to complete the sale transaction.”

Vedanta's steel business encompasses the domestic iron ore operations, assets in Liberia, and ESL Steel Ltd.

Last week, mining giant Vedanta announced that its board had given the green light to a streamlined asset-owner business model, leading to the creation of six distinct listed entities. This comprehensive restructuring is anticipated to be finalised within a period of 12-15 months, the company said.

Under this proposed plan, five new listed firms will emerge, including Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, and Vedanta Base Metals, in addition to the existing entity Vedanta Ltd.

This development came amid worries regarding the company's large debt. The company's parent Vedanta Resources has seen a slate of rating downgrades triggered by worries over its $6.4 billion outstanding debt.

Earlier, the company attempted to alleviate its debt burden by arranging for Hindustan Zinc, a subsidiary of Vedanta Ltd., to acquire certain zinc assets from the parent group in a deal valued at $2.98 billion. This strategy faced opposition from the government, which holds around 30 per cent stake in Hindustan Zinc.

As per a Business Standard report, Vedanta has total pending payments of around $4 billion until FY25. 

On Tuesday, Agarwal said, "We have payment coming due in January (2024) and August. We are completely lined up. We have a 1 billion dollar payment in January and a 500-600 million dollar payment in August. Both are completely lined up. We are looking for ways to reduce debt."

"Both repayment and refinancing options are on the table. If we get good terms, we will refinance. Refinancing is completely lined up. We are also looking to pay it from our side," he added.

Vedanta Ltd's shares surged by nearly 4 per cent on Tuesday. The stock closed at Rs 230.80 per share, marking a gain of 3.73 per cent on the BSE. During the trading session, it reached a peak of 5.07 per cent at Rs 233.80. On the NSE, the stock saw a 5 per cent increase during intra-day trading, reaching Rs 233.75. Ultimately, it settled at Rs 230.95 per share, reflecting a gain of 3.77 per cent.

This rally led to the company's market valuation, rising by Rs 3,085.07 crore to reach Rs 85,792.90 crore.